Refinery disruptions

There we go again. It’s not enough to have the very complicated Mid East crises; additionaly, two refineries shut down, with the Venezuelan refinery shut in at 956,000 bpd for 7 months… that’s going to ignite gasoline prices and hold WTI/Brent oil prices in the face of rising oil inventories.

According to the Forbes feed:

The market was reacting to supply concerns after refinery shutdowns in Venezuela and the United States, said Mark Pervan, senior resources analyst at Daiwa Securities in Melbourne.

Cooling towers at a ConocoPhillips refinery at Wood River, Illinois, have been temporarily shut down after suffering storm damage.

Meanwhile the Amuay refinery in Venezuela, which exports fuel to the United States, is set to be shut down for up to seven months after a fire last week, trade sources said.

The fire occurred at the Paraguana oil complex which produces about 956,000 barrels of oil a day.

According to Reuters, although the Wood River refinery was hit by a second storm, Connoco Philips expects the refinery to be up and running next week:

NEW YORK, July 21 (Reuters) – ConocoPhillips (COP.N: Quote, Profile, Research) on Friday said preparations for a restart of its 306,000 barrel-per-day Wood River refinery in Roxana, Illinois, will not be completed until sometime next week.

Considering the 1.3 million barrels lost by Valero’s St. Charles refinery, and the 28 days lost at the SK Corp. refineries at 425,000 bpd, the refinery disruptions is potentially the main issue pushing oil and gasoline prices higher.

We all know that its been 30 years since the last refinery was built in the US; plenty of expansions though…

Could it be that oil companies have found a way to avoid the downturn in oil prices by resisting the temptation to build new refineries with the pretext of the NIMBY public policy?